We installed a new roof on our residential home in 2024. Is this a deductible expense and Where do we enter it?

[rebeccaspann2011]

Residential home. Roof installed June 2024. Paid additional money out-of-pocket for energy efficiency. Insurance company paid the bulk.

[Opus 17]

Generally, no.  Home improvements add to your cost basis and may reduce your capital gains when you sell, so keep track.  But they are not tax deductible.

Insulation systems designed to reduce heat gain or loss are eligible for a tax credit of up to 30% on the materials only (not including labor) with a maximum credit of $1200.  An efficient roof does not count (heat reflecting granules, etc.).  But if you had additional insulation installed in the attic under the roof deck, you can claim the credit on the cost of the insulating materials.  If your bill does not show the cost of materials vs labor, you can make a reasonable allocation, but you might have to prove it if audited. 

[Mike9241]

why did you get an insurance payment? why was the roof replaced? 

generally, a roof replaced due to deterioration on a personal residence is not deductible but what you paid out of pocket adds to its tax basis.

a roof destroyed by a disaster in a federally declared disaster area might qualify for a casualty loss deduction.

this deduction would likely be the decline in fair value of the home before and after the disaster reduced by any insurance recovery

[rebeccaspann2011]

Thank you for your response.  The roof was replaced due to a declared disaster.  Straight line, windstorm damage and hail damage.  
the insurance company paid for a new roof, but not one that would withstand another hail storm.  we purchased a higher grade roof .  The difference in cost came out of pocket.  
The homeowners insurance company actually increased our renewal fee rather than reduced it.  No tax deduction or lower property value was given either.

[rebeccaspann2011]

Additionally I’m not aware that it’s a federally declared disaster, but it was declared a disaster by the governor of our state.

[Opus 17]

@rebeccaspann2011 

I don't think you have anything to go on here.

First, there's nothing you can do on your taxes this year without a FEMA number for a federal disaster.  All you can do is keep track of your costs.  What you paid extra for the upgraded roof can be added to the cost of your home when you sell and may reduce your capital gains tax, but it has no tax effect now.

Even if it was a federally declared disaster with a FEMA number, the rules are convoluted.  You can deduct the loss in fair market value to your home.  That usually requires a before and after appraisal.  If you repair the home to as-was condition, you can consider the cost of the repair as a fair estimate of the lost market value.  But you didn't do that, you rebuilt it better than it was.  You also can't deduct any loss that was covered by insurance.  What that ultimately means is that you can't deduct the "base" damage to the roof, because it was covered by insurance, and you can't deduct the higher cost of the improved roof, because that is a home improvement and not part of the loss.  The only thing you could deduct if this storm did have a FEMA number is your insurance deductible.